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Economic Efficiency and Competitiveness Professor Tommaso Vallet Imperial College London [email protected] Economic Efficiency • Static – Allocative – Productive • Dynamic Dynamic Efficiency in Theory Mobile Mergers • Genakos, Valletti, Verboven (2015) • Empirical study: – Period: 2002-2014 – 33 countries: (26 Europe, Australia, Canada, Chile, Japan, Korea, Mexico, New Zealand) – 8,000 observations – Impact of market concentration on prices (bills), investments (CAPEX), profits (EBITDA), etc • Results: – Concentration drives prices and investments up • Hypothetical symmetric 4 to 3 merger: – Prices go up by 16.3% – Capex by operator increases by 20% • Reactions: – Operators – EC UK Mobile Merger Competition and Brexit • Substance – UK competition law modelled on EU system – CMA/UK courts not bound by European case law • State control – EU State Aid rules will no longer apply – Would UK government restrict itself? – UK government could not regulate other countries – International Externalities (roaming) • Procedure/enforcement – Concurrent proceedings – Duplication for companies – No longer a one-stopshop for notification of mergers • Legal professional privilege Competition Policy and Brexit • Bad for Europe and the profession • UK influential in promoting effects-based approach • EU competition law will shift towards formalism
